Income Protection  

The 10 things advisers should know about protection

  • Understand what to know about the range of protection products and what clients protection needs are.
  • Learn about the underwriting process and where price comes in.
  • Consider clients' existing employee benefits and any suitable added value benefits.
CPD
Approx.30min

“Everyone’s situation is different and with so many variables in income protection an adviser needs to be able to ensure the customer understands what they are purchasing,” adds Martin Hedicker, income protection team manager at Assured Futures, highlighting that income protection can seem complicated.

“It’s our job to make this simple with tailored, specialist advice,” he confirms. 

Advisers should also make clear the process for taking out cover and, as part of this, why full disclosure of medical history is essential. For example, if clients omit important information that will impact underwriting, time is wasted applying with the wrong provider.

“Before asking about their health, explain how the underwriting process works and if they do have any health-related issues to disclose that you’ll call the underwriters at each insurer to see which one is likely to offer them the best terms,” adds Tom Conner, director at Drewberry. 

Finally, don’t rush the process. As explained by Mr Chadborn, client decisions made in haste are likely to be undone with equal disregard.

4. Get to grips with underwriting and how insurers may vary

Underwriting stances can vary hugely from one provider to the next.

“Do your research before recommending a provider,” says Mr Mead. “This can help you save your client a lot of wasted time, as well as a lot of money.”

Advisers should understand the client’s individual circumstances with regards to medical history, participation in hazardous sports and overseas travel. And then look at the impact these factors can have on underwriting decisions according to insurer, he adds.

Furthermore, it’s important to have an awareness of how to reduce benefits to ensure cover provided is within the client’s budget. 

“This could involve reducing the critical illness element of a mortgage protection plan, opting for budget income protection or extending the deferred period, using family income benefit instead of level term,” says Mr Lakey.

5. Know that price isn’t everything

The cheapest option is not always the best option. “Anyone can sell on price,” says Mr Mead. “But people buy benefits. It’s the whole package that adds real value.

"Get to know your additional benefits.”

Mr Conner concurs, adding that clients need to feel confident that all relevant options have been considered.

“The role of the adviser is to match the right policy – as opposed to the cheapest – to the right client,” he says. “Many people are happy to pay more for superior cover and additional benefits.”

It’s worth bearing in mind that an insurer quoting the cheapest premium, assuming standard terms, may offer a significantly higher premium than others once underwriting has been completed.